Landlords across the UK will soon be required to sign up to a compulsory arbitration scheme in an effort to improve the dispute resolution system and raise standards across the private rented sector. It’s a new landlord ombudsman.

Communities Secretary, Sajid Javid, spoke at a Conservative Party Conference late last year, stating:

“For too long, tenants have felt unable to resolve the issues they’ve faced, be it insecure tenure, unfair letting agents’ fees or poor treatment by their landlord, with little or no means of redress. We’re going to change that.”

He said the scheme would also give tenants access to “faster, more effective, justice” through a new housing court.

Landlord Ombudsman – The Property Redress Scheme

Ombudsman schemes allow an impartial authority to investigate unresolved tenant complaints and ensure landlords adhere to a specific code of conduct.

The decision of the ombudsman is legally binding, and failure to comply could result in the agent being removed from that scheme.

With the new law meaning all property agencies and landlords must be part of a government authorised redress scheme, not joining one or losing their membership could result in a £5,000 fine by local authorities.

If the landlord or agent continues to breach their requirements, their business could be closed down altogether.

Whilst it is still unclear whether the government will launch a new, single redress scheme for all private and social landlords in the UK, there are already a number of voluntary redress, arbitration and dispute resolution organisations already in operation for landlords to choose from.

Landlord Ombudsman – The Housing Ombudsman Service (HOS)

The majority of the HOS’s membership are social landlords, such as local authorities and housing associations.

Social landlords are required to join this service and, once a member, they must follow the HOS code of conduct.

Private landlords can voluntarily join the HOS if they wish, but this does not happen very often. In fact, the HOS’s annual report for showed only 71 ‘voluntary members’ for the 2016-17 period.

Having resolved 15,877 cases in the last year alone, 81% of cases brought to HOS were actually resolved by the tenant and landlord themselves with support from the HOS.

Landlord Ombudsman – The Property Ombudsman (TPO)

The Property Ombudsman is different to many other redress organisations in that they resolve complaints from both tenants and landlords complaints against sales and lettings agents.

They dealt with almost 2,000 of these disputes in 2016, 56% of which relating to the lettings sector. A total of £786,572 was paid out by agents as redress for these complaints.

45% of the complaints they oversee come from landlords, with tenants’ making up a further 51%. The most common issues they hear concern property management, communication, and complaint procedures.

Whilst the recent ban on passing letting fees to tenants has caused many landlords to stop using managing agents, TPO have launched a national campaign to tackle letting agents still hiding their total fees from landlords.

Landlord Ombudsman – National Landlords Association (NLA)

The NLA is not actually a redress scheme, but they have a code of practice that member landlords in the private sector must adhere to. This includes everything on how to create and maintain a reasonable tenancy agreement to treating tenants in a “fair, honest and respectable way”.

Tenants with landlords who are members of the NLA can file their complaints directly to the authority. The NLA are capable of either resolving the issue or suspending the landlord’s membership, much like an ombudsman scheme.

They cannot, however, impose legally binding fines or restrictions. Membership to the NLA is entirely voluntary, but they currently have more than 65,000 members.

For all questions you may have regarding your property portfolio, the Burton Beavan team are here to help. Please call us on 01606 333 900 or email us at hello@burtonbeavan.co.uk.